Tracy Venturi: Next topic, foreclosures and forbearance.

Tego Venturi: If you see a headline that talks about, you know, delinquencies and foreclosures and forbearance, remember that there are so many layers to that onion, that whatever you’re reading, probably isn’t telling you the entire story on that in, and I don’t, you know, it’s one of those topics that you just don’t even want to get into. Cause there’s so many levels to it. I’ll just give some, some, some kind of some high level stuff on that, Tracy, which is that the,

Tego Venturi: All the experts, again, all the experts, nobody is saying that we’re going to have a foreclosure crisis or a flood of foreclosures that drive down home prices in 2021. Nobody is saying that, that that’s kind of the headline. And these are, these are the economist. These are not political people. They’re just economist. They’re just looking at the data. Right? And these, these are also people that, that did get it right back in 2006, seven, when you know, they were projected, predicting it, you know, we’re going to have, we got up, we got a problem coming. Right. Which, which we ended up, we did didn’t believe. Yeah. Yeah. Let’s, let’s not go there. Just a couple high level reasons. Why is home equity embedded home equity is at just historic all time highs, which means if people are forced to sell there, they’re not necessarily going to be underwater, meaning they’re going to just sell. They’re not going to just give it back to the bank. And that’s what happened in 2008, nine, 10 is so many people were upside down on their mortgages that they couldn’t afford to sell. So they just handed back the keys and said, I’m done.

Tracy Venturi: So that was so smart. You, you embedded home equity, how is like sitting here

Tego Venturi: And am I recording this? What you said, I’m really smart. I’m going to,

Tracy Venturi: That sounded so good. So, so you know the analogy, you know, you buy a new car and a few years later you’re still paying on it and you go and you want to sell it. Sometimes what you owe on it is higher than what you owe, right? Yeah. That’s kind of the situation that we were in back in 2008, 2009, 2010, people didn’t have, you know, money equity in their home. Right. They couldn’t sell it, couldn’t sell it and get a price that would pay off the under underlying loan. Now people have a lot of equity and they can sell and walk away with money in their pocket.

Tego Venturi: I was listening to Lawrence Hune, who’s the chief economist at the national association of realtors. And they are, yeah, he’s, he’s like spreadsheets and

Tracy Venturi: Things too.

Tego Venturi: God idols. But he, you know, he made a good point or this is his quote. Actually it says any foreclosure increases will likely be quickly absorbed by the market. We will, we, excuse me, it will not lead to any price declines. So even if we have some foreclosures where people, you know, walk away from their home, we are at such a critical, low number of homes on the market that it would take.

Tracy Venturi: It would take a huge chain. It would

Tego Venturi: Take a huge change in demand, which could probably demand would only change if interest rates spike up a lot. Which again, we just talked about that, that doesn’t look likely. So any, any foreclosure activity we see is most likely just going to be absorbed by the market. It’s not gonna, it’s not going to lead to lower prices. And that’s what everybody is predicting. Right? Right.

Tracy Venturi: And we’ve had home buyers ask us, I’m worried, should I be worried about buying? And all of a sudden there’s going to be foreclosures. And the value of my house is down. We’re not the foreclosure piece is not something that we feel like is going to affect the values around.

Tego Venturi: I talked to a lot of people and you know, I know a lot of invest real estate investors, Tracy. And I, you know, we do real estate and investing and I, and I keep hearing people saying stuff like, well, I’m just waiting for the deals. And I, my answer to them is, well, you’re going to be waiting because it doesn’t look like they’re coming anytime soon.